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In: Finance
Replacement Analysis St. Johns River Shipyard's welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis
St. Johns River Shipyard's welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $82,000 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $29,000
to $58,000 per year. The new machine will be depreciated over its
5-year MACRS recovery period, so the applicable depreciation rates
are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. The
applicable corporate tax rate is 40%, and the firm's WACC is 11%.
Should the old welder be replaced by the new one? What is the NPV
of the project? Round your answer to the nearest cent.
$
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jeff jeffy answered 1 year agoRelated Solutions
Replacement Analysis St. Johns River Shipyard's welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis St. Johns River Shipyard's welding machine
is 15 years old, fully depreciated, and has no salvage value.
However, even though it is old, it is still functional as
originally designed and can be used for quite a while longer. The
new welder will cost $84,500 and have an estimated life of 8 years
with no salvage value. The new welder will be much more efficient,
however, and this enhanced efficiency will increase earnings before
depreciation from $29,000 to...
St. Johns River Shipyard's welding machine is 15 years old, fully depreciated, obsolete, and has no...
St. Johns River Shipyard's welding machine is 15 years old,
fully depreciated, obsolete, and has no salvage value. However,
even though it is obsolete, it is perfectly functional as
originally designed and can be used for quite a while longer. A new
welder will cost $182,500 and have an estimated life of 8 years
with no salvage value. The new welder will be much more efficient,
however, and this enhanced efficiency will increase earnings before
depreciation from $27,000 to $74,000...
St. Johns River Shipyard's welding machine is 15 years old, fully depreciated, and has no salvage...
St. Johns River Shipyard's welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $81,500 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $26,000
to $52,000 per...
St. Johns River Shipyard's welding machine is 15 years old, fully depreciated, and has no salvage...
St. Johns River Shipyard's welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $83,500 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $29,000
to $58,000 per...
Replacement Analysis St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis
St. Johns River Shipyards' welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $81,500 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $26,000
to...
Replacement Analysis St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis
St. Johns River Shipyards' welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $184,000
and have an estimated life of 8 years with no salvage value. The
new welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $25,000
to...
Replacement Analysis St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis
St. Johns River Shipyards' welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $80,500 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $28,000
to...
Replacement Analysis St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis
St. Johns River Shipyards' welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $84,500 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $25,000
to...
Replacement Analysis St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis
St. Johns River Shipyards' welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $180,500
and have an estimated life of 8 years with no salvage value. The
new welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $28,000
to...
Problem 11-10 Replacement Analysis St. Johns River Shipyards' welding machine is 15 years old, fully depreciated,...
Problem 11-10
Replacement Analysis
St. Johns River Shipyards' welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $80,000 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from...
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